In part one of this two-part blog series, we looked at some common credit card mistakes that people often make in their daily lives, plus how to steer clear of them as part of a broad financial plan. Proper credit card management can play a big positive role in your finances, while improper approaches to your cards can lead in the other direction entirely.

At 1st Choice Money Center, we proudly assist clients around Utah, Idaho, Delaware and Missouri with various financial needs, including quick loans like installment loans, car title loans and more. Here are some other basic credit card mistakes that people tend to make, plus how and why to avoid them.

Applying for Multiple Cards Simultaneously

While there’s nothing wrong with having multiple credit cards, applying for several at once can damage your credit score. This is because each application requires a hard inquiry on your credit report, which can lower your score by a few points.

Additionally, having too many new accounts in a short period of time may suggest to lenders that you are desperate for credit and could potentially be a higher risk borrower.

Using Credit as “Free Money” For Unaffordable Purchses

There are also some people who see credit cards as a source of “free money” and make purchases they can’t afford to pay back. This habit leads to carrying a high balance on your card, which can result in paying more interest and making it harder to pay off debt.

It’s important to remember that every purchase made with a credit card must be paid back eventually, so only use credit for purchases that you can afford to pay back within a reasonable amount of time. It’s also important to keep track of your spending and create a budget to avoid overspending.

Failure to Utilize Rewards

Nearly every credit card offered today comes with some sort of rewards program. However, many cardholders fail to take advantage of these programs and miss out on valuable benefits and cashback opportunities.

To avoid missing out on rewards, be sure to read the fine print and understand how your credit card’s rewards program works. Make a plan for using these rewards effectively – whether it’s cashing in points for travel or using cashback to pay off your balance – and make sure to regularly check for any promotions or bonuses offered by your card issuer.

Neglecting to Monitor Your Credit Score

Your credit score is an important tool in determining your financial health, and it’s impacted by many factors including credit card usage. Neglecting to monitor your credit score can lead to mistakes or fraudulent activity going unnoticed, potentially causing long-term damage to your credit.

Make sure to regularly check your credit report for any discrepancies or errors and report them immediately. You can also sign up for free credit monitoring services provided by many credit card issuers to stay on top of any changes in your score.

By avoiding these common mistakes and properly managing your credit cards, you can improve your overall financial health and set yourself up for success in the long run. Remember to always use credit responsibly and consult with financial experts, like those at 1st Choice Money Center, for personalized advice on managing your finances, plus assistance with simple, quick loan products to assist you wherever necessary.